A formal definition of the word "lease" makes a lease out to be very similar to "rent" in meaning:

noun \ˈlēs\

Definition of LEASE

a contract by which one conveys real estate, equipment, or facilities
for a specified term and for a specified rent...

a piece of land or property that is leased

a continuance or opportunity for continuance

Examples of LEASE

They took out a five-year lease on the house.

We hold leases on both of our cars.

But there is a problem with the second example!

When a modern American talks about leasing a car, he most likely means something completely different: a financing-like agreement, with a leasee's option to buy the asset for depreciated price at the end. In effect, they use the word "lease" to mean "Closed-end lease".

So, my questions are:

Is my impression correct that modern American colloquial usage of the verb "to lease" largely stopped meaning what the original "lease" meant and now means "Closed-end lease" (which, despite the word 'lease' in it, has significantly different attributes).

I specifically mean the verb, since as a noun any legal rental agreement document is frequently called a "lease"

If my impression is correct, is there any source that actually documents it? My googling didn't find any confirmation for the above point, despite the fact that I have not heard anyone in the last 10 years use it to imply that verb as anything other than "to enter into or hold a closed-end lease".

1 Answer
1

After all, when an American "leases" a car, the practical effect is very much as described by your definition 1. The lessee (note spelling) pays an agreed-upon sum of money in exchange for the right to use the car for a specified term. The details as to how this sum is determined and who retains legal ownership of the car are more technical details and, from a practical perspective, not essential in describing the contract.

You also seem to attach great importance to the option to buy the car at the end. I expect most lessees think of this as a minor extra feature, since a major reason to lease is that you get to return the car at the end of the term, rather than being stuck with it. Since they don't plan to exercise the option, it is again not an essential feature of the contract.

it makes a major difference financially. Optionality has tangible value. Besides, you CAN rent cars as well, from rental agencies.
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DVKDec 3 '11 at 15:09

@DVK: I am suggesting that lessees consider the value of this optionality to be negligible. Also, rental agencies rent cars for much shorter terms (days or weeks, not years). lease connotes a longer term than rent.
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Nate EldredgeDec 6 '11 at 2:28